NEW DIRECTIONAL PUT PLAYS

Cummins Inc. - CMI - close: 98.58 change: -1.51

Stop Loss: 101.55
Target(s): 92.50
Current Option Gain/Loss: + 0.0%
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
CMI makes diesel and natural gas engines. The stock's oversold bounce has reversed at the 50% retracement of the March-July decline. Now it looks like the decline has resumed. CMI just broke round-number support near $100 again.

I am suggesting new bearish positions at the open tomorrow with a stop loss at $101.55. There is potential support at $95.00 and the 50-dma but we are aiming for $92.50.

- Suggested Positions -

buy the Sep $95 PUT (CMI1222u95) current ask $1.70

Annotated Chart:

Entry on August xx at $ xx.xx
Average Daily Volume = 2.3 million
Listed on August 27, 2012